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Color and the importance of managing expectations

If a new startup called Color has its way, photo sharing will never be the same. The company is creating a completely smart phone-based ‘social network‘ of sorts for photos, but instead of focusing on people, it’s focusing on location, a concept some have likened to Twitter-for-pics.

Firms like Sequoia invest in people, and Color’s management team is impressive. Amongst the company’s seven founders and 30 employees are Bill Nguyen, who sold his last company, Lala, to Apple, and Peter Pham, formerly of Photobucket, and BillShrink. Color’s technical lead is DJ Patil, LinkedIn’s Chief Scientist before he was lured away to Color.

The company’s plans are ambitious, and with $41m in the bank, it’s putting the pedal to the metal. Case in point: it reportedly dropped $350,000 to acquire the Color.com domain name.

But just as in the first .com boom, money, an All-Star management team and an expensive domain name might not be a good predictor of success. Already, Color has some interesting critics and is the subject of snarky jokes.

If the initial reviews it’s receiving in the App Store and Android Market are any indication, Color’s investors may soon wonder if they made a $41m mistake.

Will Color simply prove to be a case of poor execution, or a solution searching for a problem? Perhaps. But I think the poor reception has a lot to do with expectations.

$41m for a brand new photo sharing app is a lot of money. Publicising (or failing to keep confidential) the fact that you spent hundreds of thousands of dollars on a domain name is not cool in startup land. Turning on the PR hype machine before you know you have a product polished enough to promote is a bad idea.

Obviously, launching a new business and proving yourself to consumers is very
difficult no matter who you are and how much money you have. So why is it that consumers will beat down a startup like
Color over a UI that needs improvement and a dearth of content while being unbelievably forgiving to similarly ‘rough‘ new
products? One word: expectations.

$41m in pre-launch funding from some of the biggest names in venture capital, high-profile founders with a track record of success and an extravagant domain name purchase all add up to one thing: the expectation that Color is going to really, really kick butt. After all, what excuse does it have not to?

There’s a lesson here for all companies: when launching a new product or service, how you position and promote often plays an oversize role in how well your product or service is received.

Create the impression that you’re promising consumers the world, and chances are they’ll expect you to deliver everything in it.

Take a more modest and humble approach that emphasizes what you’re trying to do — not all the resources you have to do it — and chances are you’ll find some support and positive feedback even if you’re rough around the edges.